The Merger Between Gillette and Procter and Gamble

"This merger will be the world's largest consumer goods company, this is a dream deal." Warren Buffett "This is two companies with outstanding products, strong management, excellent business model." Washington Post Michael Barbaro [1] Introduction: The merger of Gillette and P & G is exactly a strategic move by both parties. This is the marriage of companies establishing partnership between male and female product lines; the contract is worth over $ 55 billion.

Due to the merger of P & G and Gillette, P & G decided to exchange 0.975 shares of common stock per Gillette. Procter & Gamble decided to buy back its common stock after the merger. This is 18 to 22 billion dollars. This will result in a deal of 60% of the stock and 40% of the cash deal. Both companies believe that the merger will bring great synergistic effect because both are the best companies and we believe that the combination of both companies will bring a powerful brand portfolio. After the merger, Gillette has increased opportunities to sell its products in developing markets such as China and Eastern Europe.

When the merger is completed, P & G shareholders own about 71% of the companies after the merger, and Gillette shareholders own 29% of the companies after the merger. Both companies are anticipating that this merger will have a big synergistic effect. Under the agreement between the two companies, P & G will acquire the entire Gillette business including its technology, manufacturing and other facilities. Gillette and P & G call this merger a "perfect merger" because history, culture and core strengths are similar in terms of brand, scale, innovation and listing ability. The company acquired another innovative company to expand its product line, and both companies faced the problem of low sales, adopting the same approach, the two companies became the winners. After the acquisition of the entire Gillette, P & G became the world's second largest consumer goods company, with sales of approximately US $ 61 billion.

In 2005, P & G acquired Gillette, a giant shaving giant, and Gillette investor Warren Buffett called it a "dream contract". The synergistic effect is obvious - the merger will again be Buffett's word, "the world's largest consumer goods company." P & G 's CEO, Lavli also emphasized that the similar culture of both companies is an advantage of the merger. But two years later, the Wall Street Journal issued a front page report describing the cultural issues Laverly encountered in integrating these organizations. The persistent difference in values ​​and tasks is not the cause of friction. Instead, the two groups have different communication modes and deliberations. For example, Gillette has a "culture of memorandum", but P & G's "primates" tend to face meetings. Gillette made a quick decision and P & G 's decision was more careful.